App In, Driver Out: Why Digital Concierge Services aren’t Quite the Future

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This article is part of 20in20, a series of 20 blog posts in 20 days to kick off the blogging year 2020. This is 20in20:07.

Two things, side by side, in friction:

(1) App In, Driver Out

One of the most dominant business models of the last 5-10 years has been what I think of as app in, driver out: All kinds of services re-packaged to accept orders via an app, and deliver the service through a driver.

Uber may be the most prominent but certainly isn’t alone. We’ve seen the same for food delivery, for laundry pick-up and delivery, for really all kinds of things.

It’s essentially a concierge service, and hence a pure luxury offering. Offered, in this context, with a digital component and offered extremely cheaply.

(2) Innovation trickle-down from elites

The Varian Rule (2011) states that “A simple way to forecast the future is to look at what rich people have today; middle-income people will have something equivalent in 10 years, and poor people will have it in an additional decade.” Which is, by the way, just a way to rephrase William Gibson’s famous line “The future is already here — it’s just unevenly distributed”, in which he’s been exploring the ways that elites have access to innovation before the mainstream does. (Since William Gibson has been quoted saying this since the early 1990s and I like him better than Varian, I’ll stay loyal to his version.)

But there’s definitively something there, to a degree. Elites — financial or technological — have early access to things that aren’t yet available or affordable to the mainstream but might be soon. In fact, not just elites. As Alipasha rightfully points out, it’s not just elites where innovation manifests, but the edges of society more generally: subcultures, special needs, street fashion, you name it.

What shape that mainstreaming might take, if it’s the real thing or some watered-down version, is always hard to predict. Commercial air travel was certainly only affordable to elites first, then later to everybody — in this case, the essential product was the same even though the experience differed along a spectrum of convenience. Personal assistants are available to elites, yet their mainstream versions — digital assistants — are nowhere near the real deal: They’re totally different in nature and deliver a completely different value, if any.

What type of future do we want?

So where does that leave us? Turns out that this type of trickle down only works if there are products that can get cheaper because of production, or through automation. This is, surprisingly, exactly what you’d think intuitively. There’s no surprise here at all! So that’s great.

Unless those services are fully digitized or automated through things like autonomous delivery vehicles, these on-demand services simply cannot reproduce this level of concierge service.

We can digitally model the input side: app-based input can be made convenient and powerful enough. But we can’t lower the costs on the output side enough, without massively externalizing costs to the environment: Automating delivery through, say, drones, might theoretically work but at scale would unleash its own special kind of hell into the urban landscape. And unless we want to go the route of exploitation, humans need to get paid a living wage, so there are no savings to be had there, either.

Extra services cost extra money, which is why these app in, driver out services crumble all over.

So if personalized, cheap laundry delivery might sound too good to be true, that might be because it is. While I’d enjoy the service, I don’t think I’m willing to pay these externalized costs. This wouldn’t be a future I want.

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